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DirecTV’s Carey Discusses Business Strategy

3/08/2007 07:56:00 AM Eastern

Palm Beach, Fla. — HD will be a primary factor for DirecTV’s business in the near future, according to company CEO Chase Carey at the Bear Stearns 20th annual Media Conference last night, here.

“HD is clearly the centerpiece of what’s thriving in TV going forward,” said Chase. “It’s going to be the center of what’s defining excellence in TV.”

As recently announced, DirecTV will greatly increase its HD content offerings in 2007. Chase said that the company’s position in providing HD content, combined with its focus on making its products easy for the mainstream consumer to navigate, will set it apart from the competition.

When asked about how his company will compete with telco TV providers offering a bundle of services, Carey said, “We’re very competitive with the bundle.”

He explained that he thinks consumers have multiple options when it comes to satisfying their desires to getting a combination of technologies and that his company can remain competitive just providing video services because he believes that for many consumers it is “first and foremost about a great TV experience.” He added that DirecTV can differentiate itself through its content, technology and service. Carey said that his company wants “to be a leader in TV” because he believes it is important to people.

“The bundle is mostly about price,” said Carey. “Within that mix of services, I think TV is the one people care most about.”

One of the key ways Carey thinks DirecTV can differentiate itself is through content. Unique programming — both paid and unpaid — is key for the company. Carey said that DirecTV sees significant direct return on ventures like the NFL Sunday ticket but that it also sees importance in providing certain content like last year’s U.S. Open at no additional charge to members because it is an investment in the DirecTV brand and franchise.

“The payback is not just with more customers, but better customers,” said Carey, explaining that its exclusive programming ventures are generally developed to appeal to a higher-end customer. “We believe it pays back.”

Content packaging appears to be a key component for DirecTV on a number of planes including its approach to the growing video-on-demand (VOD) market. Carey maintained that VOD is still a very small part of DirecTV’s focus at this point.

“Many customers still have to grow into VOD,” he said “There aren’t too many who understand it.”

When the question of whether or not DirecTV will be able to compete as VOD develops more in the mainstream because of “return path issues,” Carey answered that his company expects to be “fully competitive in many ways.”

He said DirecTV will develop its VOD capabilities through its delivery system by increasing space on the disks in the home so that customers can receive and store more content from the satellites and marrying that to a broadband connection.

Carey expressed that with VOD there is a need to integrate the content into his company’s structure and develop the appropriate tools for consumers to easily navigate and sort the content. He said, “The right answer isn’t just to throw as much stuff at the wall and just tell people to go find it.”

To listen to the complete presentation, click here.